Frost v. Liberty Mut. Ins. Co.

• Decision Date: 25 February 1992
• Docket Number: No. WD,WD
• Citation: 828 S.W.2d 915
• Parties: John FROST and Beverly Frost, and Ruby Louise Gibson, Appellants, v. LIBERTY MUTUAL INSURANCE COMPANY, and U.S.A.A., Respondents. 43993.
• Court: Missouri Court of Appeals

Page 915

828 S.W.2d 915

John FROST and Beverly Frost, and Ruby Louise Gibson, Appellants, v. LIBERTY MUTUAL INSURANCE COMPANY, and U.S.A.A., Respondents.

No. WD 43993.

Missouri Court of Appeals,

Western District.

Feb. 25, 1992.

Motion for Rehearing and/or Transfer to Supreme Court Denied

March 31, 1992.

Application to Transfer Denied June 2, 1992.

Leonard K. Breon, Breon & Leffler, Warrensburg, for John Frost and Beverly Frost.

C. Michael Fitzgerald, Fitzgerald, Fitzgerald, & Carter, Warrensburg, for Ruby Louise Gibson.

Paul L. Wickens, James T. Thompson, Sherman, Wickens & Lysaught, P.C., Kansas City, for Liberty Mut. Ins. Co.

William H. Sanders, Peter B. Sloan, Blackwell, Sanders, Matheny, Weary & Lombardi, Kansas City, for U.S.A.A.

Before BERREY, P.J., and BRECKENRIDGE and ULRICH, JJ.

BRECKENRIDGE, Judge.

Appellants, John Frost, Beverly Frost and Ruby Gibson, appeal from the trial court's grant of summary judgment in favor of respondents, Liberty Mutual Ins. Co. and United States Automobile Association (USAA). The Frosts present three points on appeal, claiming that the trial court erred in holding that: (1) Liberty Mutual's policy accorded single-limit uninsured motorist coverage of $50,000.00 for all injuries of all persons arising out of a motor vehicle collision between vehicles driven by John Gibson and Hubert White; (2) USAA's policy did not accord the Frosts any coverage for their damages incurred in the Gibson-White collision; and (3) Liberty Mutual had reasonable cause or excuse to refuse to pay the Frosts' uninsured motorist loss. Mrs. Gibson raises two points in this appeal: (1) that the trial court erred in holding that Liberty Mutual's policy accorded single-limit uninsured motorist coverage of $50,000.00 for all of the injuries of all of the persons arising out of the Gibson-White collision; and (2) that the trial court erred in holding that USAA's policy only accorded Gibson $15,000.00 uninsured motorist coverage.

On June 14, 1988, Ruby Gibson's husband John, an Arizona resident, rented a car from Alamo Rent-A-Car in Kansas City, Missouri. The following day, June 15, 1988, John Gibson was driving his rental car on Missouri Route 13 when it was struck head on by a vehicle operated by Hubert White. White was an uninsured motorist. John Gibson died as a result of the accident. His passenger, John Frost, sustained injuries as a result of the wreck.

Mr. Gibson had an insurance policy with USAA covering four vehicles that were registered and garaged in Arizona. Liberty Mutual insured Alamo Rent-A-Car's worldwide operations and, at the time of the accident, the Liberty Mutual Policy was in force and effect. Both the USAA policy and the Liberty Mutual policy included uninsured motorist coverage.

Litigation in this action was commenced when the Frosts filed suit against White on November 8, 1988. A judgment was had against White in favor of the Frosts. This judgment was reversed in Frost v. White, 778 S.W.2d 670 (Mo.App.1989), where this court held that Liberty Mutual's motion to intervene had been wrongly denied by the trial court. After remand, the trial court entered an order allowing Liberty Mutual to intervene. Liberty Mutual filed a motion to vacate the judgment in favor of the Frosts and the trial court sustained that motion. The Missouri Supreme Court upheld the action of the trial court. Frost v. Liberty Mut. Ins. Co., 813 S.W.2d 302 (Mo. banc 1991). The Frosts have settled with their own uninsured motorist carrier, American States Insurance Company.

On March 9, 1989, the Frosts filed a declaratory judgment action seeking a judicial determination as to what the extent of USAA's and Liberty Mutual's insurance coverage was for their claimed damages. Liberty Mutual filed an action for interpleader naming the Frosts and Ruby Gibson as defendants and paid into the court the sum of $50,000.00, the amount it contended its policy accorded coverage for the accident. Eventually all of the actions arising out of the Gibson-White collision were consolidated. All parties solicited summary judgment. The trial court's docket entry on the matter of summary judgment stated:

The court, having considered the arguments of counsel, the extensive briefs of counsel, the law in the State of Missouri and the law in the State of Arizona, as it applies to the facts of this case, and having fully taken this case under advisement, does hereby make the following findings and orders: 1) The court enters summary judgment in favor of U.S.A.A. as follows: a) The court finds that Arizona law applies; b) The policy provisions excluding stacking of uninsured motorist coverage is, therefore effective; and c) Mr. and Mrs. Frost are not "covered persons" as defined in part C--uninsured motorists coverage of the U.S.A.A. policies. Therefore, U.S.A.A. has no uninsured motorist coverage liability as to Mr. & Mrs. Frost, and it has no liability to Ruby Gibson beyond the sum of $15,000.00. 2) The court finds no significant ambiguity in the policy of Liberty Mutual. The court finds that the policy provides a $50,000.00 single limit for all injuries of all persons. This is an amount to be divided between the Frosts and Ruby Gibson. Therefore, the motion of Liberty Mutual for summary judgment as to count I of plaintiffs petition is hereby sustained. 3) As a necessary result, plaintiffs John and Beverly Frost, and Ruby Louise Gibson's motions for summary judgment in their favor are denied. 4) Court enters summary judgment in favor of Liberty Mutual on count II of plaintiff's Frosts [sic] petition, namely its cause of action for vexatious refusal to pay. Since Liberty Mutual paid into court in a timely fashion the full amount of its policy limits as this court found them to be, it necessarily follows that the ruling of this court should be, and is hereby that judgment be entered in favor of Liberty Mutual on count II of plaintiffs Frosts [sic] petition. The court intends that these judgments be final for purposes of appeal, and the court expressly determines that there is no just reason for delay, pursuant to Missouri Supreme Court Rule 74.01(b).

Both the Frosts and Mrs. Gibson appeal.

As both the Frosts' Point I and Mrs. Gibson's Point I concern the same issue, they will be considered together. Both assert that the trial court erred in holding that Liberty Mutual's policy accorded single-limit uninsured motorist coverage of $50,000.00 for all injuries of all persons arising out of the Gibson-White collision. They contend this is error because Missouri law requires at least $25,000.00 per person and $50,000.00 per accident uninsured motorist coverage and because the Liberty Mutual Policy accorded unbounded uninsured motorist coverage until the day after the collision. Both the Frosts and Mrs. Gibson further contend that the ruling is without supportive evidence, is against the weight of the evidence and is an erroneous application of the law under Murphy v. Carron, 536 S.W.2d 30, 32 (Mo.1976).

Summary judgment shall be entered for the party seeking it, "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Rule 74.04(c). When considering a motion for summary judgment, an appellate court reviews the record in the light most favorable to the party against whom the motion was filed, according that party all reasonable inferences drawn from the evidence. Gast v. Ebert, 739 S.W.2d 545, 546 (Mo. banc 1987).

The Liberty Mutual policy with Alamo Rent-A-Car contained the following statement: "Regardless of the number of covered autos, insureds, claims made or vehicles involved in the accident, the most we will pay for all damages resulting from any one accident is the limit of UNINSURED MOTORISTS INSURANCE shown in the declarations." As of the date of the accident, the only amount shown on the declarations portion of the policy in Item 8, page 5, was $1,000,000.00. This amount, however, was only applicable if the renter purchased the Extended Protection Option. It is not applicable in the instant case because John Gibson did not purchase this option. The next page in the document, Item 8, page 6, has a blank space next to Missouri on a form again referring to the schedule of limit of liability for uninsured motorists insurance. This form also has the proviso that it applies only with the purchase of the Extended Protection Option. The policy clearly identifies this latter proviso as an error, however, as an amendment dated November 17, 1987 deletes the language referring to the Extended Protection Option and adds, "[t]his schedule applies to any covered auto other than an auto used under a rental agreement in which the rentee elected the Extended Protection Option (E.P.)." This provision would be controlling, except that the day after the accident another amendatory endorsement, Endorsement 64, was added limiting coverage in Missouri to $50,000.00 for renters who did not elect extended protection and stating an effective date of May 11, 1988.

According to affidavits provided by Rochelle Feinberg, manager of corporate claims for Alamo Rent-A-Car, and Tom Livingston, chief underwriter in the home office transport department of Liberty Mutual, the original policy contained several typographical errors. Alamo Rent-A-Car did not rent cars in Missouri as of October 16, 1987, the date of the replacement policy issued to correct the typographical errors in the original policy. Alamo Rent-A-Car advised Liberty Mutual on April 25, 1988, that it was renting cars in Missouri and requested that Liberty Mutual endorse the policy to provide uninsured motorist coverage for the state of Missouri in the amount of $50,000.00. Endorsement 64 was prepared with an effective date of May 11, 1988. Coincidentally, it was not until the day after the accident, ...